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38.2

Barriers to implementation

Farmer

Farmers have very low income. This means that they will not be able to afford the in app sales. This means that they will be unlikely to bother downloading the app.

Farmer may not be willing to change their current ways of working. Fear of the unknown may cause farmers not to attempt downloading the app.

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The majority of users are expected to be small holders, they will also bring in the largest chunk of revenue and profit. The medium-sized farms bring in the least revenue, but they do bring in a $1 annual fee which will increase revenue and profit margins.

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Marketing can be split into three different sections: Research, Segmentation and Mix.

Research:

Kehti should use desk and field research to understand the market better. This could cover things such as competitors and potential uptake (although some of this has been done already). Limitations on this will be cost and whether historic data is useful for future forecasts. This is especially true as India is digitalising quickly so % uptake may dramatically change quickly.

Sementation:

Kehti should split marketing strategies into the three market segmentations defined. A different approach to each one is needed. Small will be BTC whilst med and co-op is likely to be BTB. Promotion should therefore be different. Pull promotion to BTC whilst push to BTB.

Mix: (4Ps)

Price:

This should focus on the 4Cs. Should use customer, cost, corporate objectives and competition to determine price. Price is a key issue for Kehti as farmers are likely unable to afford membership fees. Could offer shorter periods I.e. a month or do a promotional offer like first 6 months free so customers are more willing to pay more.

Place:

As the product is app the sales of membership fees and in-app purchases will be direct to the customer.

Promotional:

As Kehti wishes to be seen as force for good in farming space then promotion should be about pushing an educational message. The tone should not be too formal. Kehti should also recognise the importance of crops to farmers livelihoods and therefore understand that trusting the app to determine decisions which affect crop growth may not happen overnight. Therefore promotion should not too forceful!

Products:

Kehti should ensure the app functions well and smoothly. It should test it before releasing to ensure that if there are lots of users on it it doesn’t crash. May wish to get legal advice over data collection and ensure customers give appropriate consent

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Number of users is highest in small farms (4.2m) with medium farms being the least number of users (1.05m) despite having the highest % ownership of mobile phones.

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Expected number annual revenu $ gross profit $

Sallhoders 4200000 10500000 2625000

medium 1050000 5250000 1312500

co-operative 2640000 9240000 2310000

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Barriers for implementation for Kehti:

There are significant upfront costs for Kehti, including the investment in AI and data storage.

There is a large volume of data from a variety of sources - ie the weatherm the soil sensors, etc - that Kehti would need to process to give the farmers the promised results. This may be difficult to do on a large scale.

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Expected number of users:

Smallholders: 120x35%x10% = 4.2 million

Medium-size: 35x60%x5% = 1.05 million

Farming Co-op: 55x40%x12%= 2.64 million

Expected Revenue:

Smallholders: 4.2 million x $2.50 = $10.5m

Medium-size: 1.05 million x $1.05 = $5.25m

Farming Co-op: 2.64 million x $3.50=$9.24m

Gross Profit

Smallholders: $10.5m x 25% + 0 = $2.625m

Medium-size: $5.25m x 25% + $1.05m = $2.3625m

Farming Co-op:$9.24m x 25% + 0 = $2.31m

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Barriers for implementation for the farmers:

Many farmers have low income, meaning they may not be able to afford the annual fee and soil-condition sensor in order to use the app. Similarly, many do not have access to a smart-phone in order to use the app.

The farmers, who are used to their traditional farming techniques, may be hesitant to the change of using the digitial app.

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The small sized companies seems to have the highest revenue and operating margin which can signify the expectation that the farmers are small holders. It is worth 36% of their total gross profit which can signify the importance it has for the company.

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Kehti

Threat of competition / IP being stolen. Once Kehti goes to market the app could be stolen by competition. Should obtain legal and advice and patents which could be costly.

Kehti has no experience in this areas and could not understand the regulations surrounding data storage / use.

Likely to be large upfront costs to get app to market - would likely need to raise funds

Farmers

The main barrier to implementation for the farmers are the lack of smart phones with only 40.5% of the population owning them. Without smart phones it is impossible to use the app. The fund to provide smart phones may lessen this barrier however unclear on time scales or scale of fund so hard to tell ultimate impact.

Additionally, the farmers may be sceptical of the new technology with traditional methods currently used. There would need to be education surrounding the app which Kehti may not have time / resources for.

For the medium farms the annual fee may be the barrier to entry considering least amount of take up (5%) in this category.

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Kehti

The technology used for the Kehti app may be too advanced for the customer as the vast majority of the farmer haven't got access to their phones.

The apps may be too complicated and complex for them as they will have to but a soil condition sensor on how to use the seeds and fertilizer.

The farmers have low income so they will be unable to purchase the additional features needed to make their experience better.

The cultural shift that they will need to do to incorporate modern technology in the traditional farming may seem difficult for them.

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Barriers for Kheti:

Vast market and kheti might not have the resources to target all segments. The AI strategy will also need a lot of upfront investment which will require funding and will be expensive. Kheti may also lack technological expertise to implement the data solution. There may also be legal and security implications regarding holding farmers data. Will need to make sure appropriate controls are put in place. The fragmented market means that targeting appropriate customers could become very time consuming. the wide variety of soil types may mean that AI analysis could take a long time to be effective. It also require string mobile coverage and levels of technological development.

Barriers for Farmers:

The level of ownership of smartphones is varied from region to region so the product may not be accessible. It also may be to expensive for some smallholders with low income. Older famers may be more resistant to change and prefer more traditional techniques. It will also take time for farmers to adapt to new technologies and they may need training and tech support.

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Kheti could use the marketing mix to assess their marketing strategy for the new app. Since this is a service, this would be the 7 P’s.

Product – The quality of the app should be important. Considering the high amount of data being fed through the app, and the potential for a large amount of users across rural India, where internet connection could be limited, Kehti needs to make sure the App is able to do this.

Price – This is a key area for Kehti’s marketing strategy, as their customers, particularly the small farms, will want as little cost as possible. Kehti needs to come up with a price that is affordable to their targeted market, whilst also bringing in a profit. Price differentiation may be used here, to offer a different price for the services, depending on the customer.

Place – the app should be made available on the most popular app stores in india, whether this is the apple app store, google play store,etc – ideally available on all of them.

Promotion – Kehti will need to understand how to promote their new app, considering that the farmers may not have access to internet at all times. Perhaps advertising at local farmer markets could be a good idea.

People – although it is in an App, are there any customer service operators that farmers may need to consult with? If so, they will need to have the appropriate knowledge to do so.

Processes – the app should be easily accessible to the users, particularly those not used to using technology

Physical evidence – the results from the app should be visible to the users, otherwise, if they follow the app’s directions and see worse or no results, it would create a bad brand image

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They could use the 4ps to help asses the marketing strategy for the new app.

Price: they should be able to decide whether they will want to include the annual fees for the small companies similar to medium companies and see the effect that it may cause.

Product: they could provide the additional equipment for them to use to make them being able to use the app to its maximum. This can lead to more of the user deciding to download the kehti app.

Promotion: they should make it very clear and simple for them to be able to understand the usefulness of the app and hoe beneficial it is for them.